Most Retailers Top Estimates, Some See Weak March

Despite storms and rising gasoline prices, many retailers reported monthly sales that managed to top analysts' estimates, but some warned of a weaker March due the timing of the Easter holiday.

February typically is a month where retailers clear out winter merchandise and begin to introduce items for warmer weather. Analysts surveyed by Thomson Reuters expect same-store sales for the retailers who are reporting to rise 3.6 percent from the same period last year.

The Thomson Reuters Same-Store Sales Index rose 4.2 percent in February, topping not only estimates, which called for an increase of 3.6 percent, but also growth in the year-ago period.

February is the least important month of most retailer's fiscal first quarter calendar, as it generally is focused on clearing out winter-related merchandise, and preparing for the release of goods for the warmer weather ahead.

Target, which was one of the few retailers falling short of estimates, was among the retailers warning that it would be hurt by the shift in the timing of Easter, which falls three weeks later than last year.

"This means March may be abnormally soft as consumers digest the recent headlines and the associated negative hit on their budgets (gasoline, food), and save up for Easter-targeted deals in April," said Brian Sozzi, an analyst at Wall Street Securities.

Still, for the latest month, many retailers managed to top estimates for same-store sales. Among them was Limited Brands [LTD  31.67    -0.47  (-1.46%)   ], which saw continued strength at its Victoria Secret and Bath & Body Works stores.

Limited said same-store sales rose 12 percent in February from the year-ago period, outpacing the 8.5 percent average analyst estimate reported by Thomson Reuters.

Teen retailers Wet Seal [WTSLA  4.05    0.20  (+5.19%)   ] and Zumiez [ZUMZ  27.01    1.07  (+4.12%)   ] also topped analysts' estimates.

This is the first month that their rivals Abercrombie & Fitch [ANF  58.88    0.40  (+0.68%)   ], Aeropostale [ARO  26.0625    0.0825  (+0.32%)   ] and American Eagle [AEO  15.50    0.15  (+0.98%)   ] are no longer reporting same-store sales on a monthly basis. Those retailers joined a growing number of retailers, including Wal-Mart Stores [WMT  51.87    -0.10  (-0.19%)   ] that do not report same-store sales growth each month.

As the other results come in Thursday, one wildcard will be the weather. February began with several serious storms, which may have prompted consumers to postpone purchases or shift those purchases online.

Macy's [M  23.86    0.28  (+1.19%)   ], for example, saw strong growth in its online sales, which rose 30.9 percent during the month. Macy's includes online sales in its same-store sales calculations.

Those results helped Macy's top analysts' estimates for the month. The department store reported same-store sales growth of 5.8 percent, compared with the 3.7 percent estimate published by Thomson Reuters.

Stage Stores [SSI  17.07    -0.13  (-0.76%)   ] said its performance was hurt by the weather. The company said its same-store sales fell 7.2 percent in February, missing analysts' estimates, which called for sales to rise 2.5 percent, by a wide margin.

Stage Store President and CEO Andy Hall said that the retailer's traffic trends "remain solid," and he added that the company said same-store sales growth of 10 percent in the second half of the month. However, that growth was not enough to offset the impact of lost sales earlier in the month.

About 51 percent the of the company's business was in states hit hard by storms at the start of February, the company said.

Discounter Target [TGT  51.78    -0.52  (-0.99%)   ] also fell short of estimates, although the company said the results were "in line" with its expectations for the month.

Target's same-store sales rose 1.8 percent from last year, compared with the average analyst estimate of 2.2 percent.

Target also said it expects the shift in the timing of Easter to result in a "mid- to upper-single-digit decline" in its March same-store sales, followed by a "mid-teens" increase in its April Same-store sales. These two results would result in a "low-single-digit increase" in Target's same-store sales for the combined March and April period.

For the results so far, look at the following table.

February 2011 Same-Store Sales

Retailers	February 2011 Estimates	February 2011 Actuals
Costco	6.7%	8.0%
BJ's Wholesale	3.3%	5.5%
Target	2.2%	1.8%
JC Penney	4.2%	6.4%
Kohl's Department Store	4.1%	5%
Dillards Department Store	2.5%	(1%)
JW Nordstrom	4.2%	7.3%
Saks Department Store	4.9%	15.3%
Stage Stores	2.5%	(7.2%)
Macy's	3.7%	5.8%
Gap	(0.9%)	(3%)
TJX	2.8%	3%
Limited	8.5%	12%
Ross Stores	1.7%	3%
Stein Mart	1.0%	8.2%
Hot Topic	(5.0%)	(1.4%)
Wet Seal	(1.0%)	7.0%
The Buckle	2.8%	2.1%
Zumiez	4.2%	12.8%
Walgreen	3.5%	3.1%
Rite Aid	1.5%	1.0%

Source: Thomson Reuters; Figures in parenthesis are losses.